CBN Mandates 0.5% Cybersecurity Levy for Banks

In a bid to bolster cybersecurity measures within the financial sector, the Central Bank of Nigeria (CBN) has mandated a 0.5% transaction fee on cybersecurity for Nigerian deposit money banks.

The levy, announced via a circular issued to all commercial, merchant, non-interest, and payment service banks, as well as mobile money operators and payment service providers, is set to take effect two weeks from the circular’s date.

The circular, dated May 6, 2024, outlined the specifics of the levy, stating that a levy of 0.5% of all electronic transactions’ value is to be remitted to the National Cybersecurity Fund (NCF), administered by the Office of the National Security Adviser (ONSA).

This directive comes in the wake of the enactment of the Cybercrime (Prohibition, Prevention, etc.) (amendment) Act 2024, pursuant to the provision of Section 44 (2) (a) of the Act.

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The levy is to be applied at the point of origination of an electronic transfer, with financial institutions required to deduct and remit the amount to the NCF. Deductions are set to commence within two weeks of the circular’s issuance, with monthly remittances of collected levies scheduled to be made to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.

However, certain transactions are exempt from the levy, including loan payments and disbursements, salary payments, and intra-account transfers within the same bank or between different banks for the same customer. Interbranch transfers within banks, cheque clearing and settlements, letters of credit, and bulk fund movements from collection accounts are also excluded from the levy.

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In addition to the cybersecurity levy, the CBN has ordered banks to deduct 0.375% stamp duty from all mortgage-backed bonds and loans. Furthermore, fintech companies such as Opay and Palmpay have been prohibited from accepting new clients, as part of the regulatory measures aimed at ensuring compliance and strengthening the financial sector’s resilience against cyber threats.

As the financial landscape continues to evolve, the implementation of cybersecurity measures remains paramount in safeguarding electronic transactions and preserving the integrity of the banking system.